MetLife Caught Penalizing Drivers Who Weren’t At Fault In Accidents

This story isn’t just about possible malfeasance by MetLife insurance in Massachusetts. It’s also a good example for why screwed-over consumers should file complaints with regulatory agencies.

While it may be fine for auto insurance providers to hit policyholders with a surcharge if the company deems them to be at-fault in an accident, Massachusetts law dictates that if the driver appeals that ruling to the state and the state finds that the driver was not actually the one to blame, the surcharge is to be refunded.

And yet, at least in some cases, MetLife was apparently not giving the money back after the state said it had to.

Today, it was announced that the insurer had reached a settlement with the state regarding these allegations. It will refund all surcharges to policyholders who should not have been hit with the surcharge and will pay a $50,000 penalty to the state.

The Mass. Attorney General’s office is also looking into the possibility that other insurers might have unjustly penalized drivers who were not at-fault.

The entire investigation began after a MetLife policyholder complained to the state that he had been hit with a $700 surcharge, in spite of the fact that the state appeals board had vindicated him.

“This is another example of an auto insurance rating problem that our office discovered as a result of a consumer complaint,” said Mass. Attorney General Martha Coakley. “While we are troubled that these overcharges occurred, we are pleased that we were able to stop this unlawful practice and protect consumers.”

We can’t underscore enough the need for consumers to complain — not just to us, or other media, or the Better Business Bureau (which, contrary to popular belief, has absolutely no authority other than to give a company a bad rating) — but to also take their issues to state and federal regulators. It may not result in a quick refund, but it could be the foot in the door that stops a company from continuing its bad business practices.